84 P. 271 | Cal. Ct. App. | 1906
The defendant is a beneficial association incorporated under the laws of this state, of which Sigmund Bornstein was a member from November 11, 1875, until his death, March 6, 1901. December 1, 1891, the defendant issued to said Bornstein its "beneficiary certificate," by which it agreed that, upon condition that the said Bornstein should comply with the laws, rules and regulations then governing the defendant or that thereafter might be enacted for its government, *626 and should be in good standing at the time of his death, and a contributor to the widows' and orphans' beneficiary fund of the defendant, it would pay to Rosalie Bornstein (the plaintiff herein), wife of said Sigmund, the sum of $2,000 upon satisfactory proof by her of his death and the surrender of said certificate. At the time of the issuance of said certificate it was provided by the by-laws of the defendant that upon the death of a member in good standing in its widows' and orphans' beneficiary fund the sum of $2,000 should be paid to his widow, and that every applicant for a beneficiary certificate in said fund, if a married man, should in his application designate his wife as his sole beneficiary. From the time of the issuance to him of said certificate until his death Bornstein regularly paid the assessments and dues required of him as a contributor to said fund. February 20, 1901, the defendant enacted as follows: "The beneficiary membership shall be divided into two grades, to be designated as 'first grade' and 'second grade,' respectively. First grade shall include all members holding beneficiary certificates in the sum of one thousand dollars, and second grade shall include all members holding beneficiary certificates in the sum of five hundred dollars. All beneficiary certificates now outstanding in the sum of two thousand dollars shall become and be void for any sum in excess of one thousand dollars on the first day of March, 1901, and all certificates now outstanding in the sum of two thousand dollars shall be and the same are hereby recalled, and the Grand Secretary is hereby authorized and directed to cancel the same, and to issue in lieu of each such certificate a first grade certificate for the sum of one thousand dollars or a second grade certificate for the sum of five hundred dollars, as the beneficiary may elect; provided that in the event that such election shall not be made at or prior to the first day of March, 1901, then and in that event for all purposes until such election shall be made the said beneficiary shall be rated as a first grade beneficiary member, and be charged with premiums accordingly." Bornstein died March 6, 1901, and, upon the demand of the plaintiff for the amount named in the aforesaid certificate, the defendant refused to comply therewith, but offered to pay her the sum of $1,000 and no more, and she thereupon commenced the present action. The court found that all the conditions required *627 by the terms of the certificate to be performed on the part of the plaintiff, or on the part of her husband, had been fully and duly performed, and that her husband had fully and duly performed all and singular his agreements and covenants with the defendant "except as to the requirements of the aforesaid enactment" of February 20, 1901. It also found that the assets in the widows' and orphans' beneficiary fund were greatly in excess of the amount required to pay the plaintiff's claim. It held, however, that by virtue of the aforesaid action of the defendant in February, 1901, the plaintiff was entitled to receive only the sum of $1,000, and rendered judgment accordingly. The plaintiff moved for a new trial, and from the order denying her motion, and from the aforesaid judgment, she has appealed.
The question presented upon the appeal is the effect of the proceedings by the defendant in February, 1901, upon the beneficiary certificate issued by it to Sigmund Bornstein in December, 1891; the appellant contending that upon the issuance of the certificate a contract was entered into between the defendant and her husband whose terms could not be varied without his assent; and the respondent contending, on the other hand, as was held by the superior court, that the aforesaid proceeding was the enactment by the defendant of a by-law which was binding upon all of its members, and that upon its enactment the contract with her husband was thereafter subject to its terms. The function of a by-law of a private corporation is to prescribe the rights and duties of the members in reference to the internal government of the corporation and the management of its affairs; and in reference also to the rights and duties which exist between the members themselves by virtue of their membership in the same corporate body. The right of a private corporation to enact such by-laws is inherent and incident to its existence. This power is subject to the condition that the by-law must be reasonable, and not contravene or be inconsistent with the charter or any existing law of the state. (People's Home Sav. Bank v. Sadler,
The relation of Bornstein to the defendant was of a dual character. As one of its members he submitted his wishes respecting its government and the management of its affairs to the will of the majority, and was bound by the action that such majority should take within the scope of the charter, even though protested against by him. He also, by virtue of the beneficiary certificate, held a contractual relation with the defendant, in which the rights of the respective parties are to be measured by the terms of the contract itself. A beneficiary certificate of a fraternal association is a contract *629
of insurance (Commonwealth v. Wetherbee,
It must be held, therefore, that the certificate issued by the defendant to the plaintiff's husband was not affected by the enactment of February, 1901, and that the plaintiff is entitled to recover its full amount.
The judgment and order appealed from are reversed, and the superior court is directed to enter a judgment in favor of the plaintiff and against the defendant for the sum of $2,000, with interest thereon from January 7, 1902, together with her costs of suit.
Cooper, J., and Hall, J., concurred. *633